Bitcoin exposure now possible in an ISA

aaj123

At least one brokerage provides access to this newly launched ETF. But be aware of 2% pa fee and fx charges (this brokerage applies 1.25% each time you buy or sell) due to ETF being quoted in EUR.

On the plus side, this ETF is backed by purchase of real BTC.

https://www.investments.halifax.co.uk/shares-centre/exchange-traded-fund/details/BTCE/DE000A27Z304/0P0001K5IC

2% pa mgmt fee is high but the thing to consider is whether you expect exponential growth in the next few years in which case while exiting, you can save 20% cap gains tax and emerge better even with the 2% charge incurred per annum. Further in case of an ISA, don't forget that emerging with gains will mean a large amount of proceeds sitting inside your tax free ISA wrapper that continue to be exempt from capital gains tax even when you switch over to other investments within the ISA.

With Bitcoin in particular, possibilities of a 500 to 1000% gains in next few years cannot be ruled out at all so then this ISA will save a fair amount of tax and leave you with a large ISA pot that remains exempt from capital gains tax.

mr_accountant

Thanks for warning me, I'll give it a miss,  if i want to gamble I'll try the casino

aaj123

mr_accountant said:

Thanks for warning me, I'll give it a miss,  if i want to gamble I'll try the casino

Ignorance is bliss. I encourage everyone to do their own research and not to take your comment as gospel.

bowlhead99

Having said on another thread that I was now down to my last 0.1 bitcoin, held just as a curiosity, I have bought a couple of thousand worth of this for my sipp. One day it may be worth something or nothing.

For my ISA, which I can access from day to day or for more medium term objectives, I don't really want things that might be worth something or nothing, and would rather have some 'proper' investment - other than a small portion for punts, and that portion is already filled.  Whereas the pension is not going to be used for a decade or two or three or more, so has its own 'playful' component, and had some new cash looking for a home after recent tax relief arrived in it last week.

Of course, $10800 per coin may prove to be way more than the right amount to be paying, and maybe I would add more the next time we inevitably see it at $5000, or not, but that no doubt has its own discussion elsewhere.

Sorcerer2018

I'm out, and I have made bitcoin bought and sold bit coin, and studied the block chain technology behind it, as I am a computer scientist, but no way I would buy it now, it's worse than buying gold, at least that has a physical bit. If you lose your computer/usb stick, and if you get hacked, it's gone. Be wearily of anything where somebody says it can go up 1000% because it's done so in the past does not mean it will do it again. Curious how you value the coins, since you have nothing to base that on, what makes a coin cheap at $5000 each. It's just a number out of thin air. The Support at $5000 is because other people are thinking they same as you, until they don't and the price drops. Also another point at $10,000 a coin to make 1000% the coin would need to reach $100,000 a coin.

aaj123

Sorcerer2018 said:

Curious how you value the coins, since you have nothing to base that on, what makes a coin cheap at $5000 each. It's just a number out of thin air. The Support at $5000 is because other people are thinking they same as you, until they don't and the price drops. 

There are plenty of Bitcoin specific forums to discuss details but I will only say that you are completely wrong that these numbers are plucked out of air. There is a fair body of knowledge now around how to assess valuation of crypto assets. On this forum, I will only leave you with this:
https://coinmetrics.substack.com/p/coin-metrics-state-of-the-network-6f5
https://coinmetrics.io/coin-metrics-state-of-the-network-issue-40-cryptoasset-valuation-research-primer-part-2/

And coming back to the ETF via ISA, the whole point is that you can't lose that by getting your computer hacked. This is the advantage of the ETF over holding coins directly.

Seldonista

aaj123 said:

Sorcerer2018 said:

Curious how you value the coins, since you have nothing to base that on, what makes a coin cheap at $5000 each. It's just a number out of thin air. The Support at $5000 is because other people are thinking they same as you, until they don't and the price drops. 

There are plenty of Bitcoin specific forums to discuss details but I will only say that you are completely wrong that these numbers are plucked out of air. There is a fair body of knowledge now around how to assess valuation of crypto assets. On this forum, I will only leave you with this:



And coming back to the ETF via ISA, the whole point is that you can't lose that by getting your computer hacked. This is the advantage of the ETF over holding coins directly.

But if it's a currency how do you assess its value without guessing? At least with stocks, bonds, property or cash you can know or guess the return, I don't know how you can know or guess the value of a currency.

aaj123

Seldonista said:

But if it's a currency how do you assess its value without guessing? At least with stocks, bonds, property or cash you can know or guess the return, I don't know how you can know or guess the value of a currency.

Sorry I am not going to answer that question although the links I provided in the above post already gave as much knowledge as I want to on this forum.

Here is more reading:
https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/bitinvthessisstoreofvalue.pdf

In any case, the purpose of this thread was not to recommend Bitcoin exposure but rather to inform that such exposure is now available in an ISA.

aaj123

Seeing how sceptical some of the folks here were at the time of above thread in July 2020, I can only say they learnt a lesson to be a bit more openminded about investments.
Unfortunately daddy FCA has now prevented retail from investing into Bitcoin through products that could have been held within an ISA. The opportunity was indeed awesome in July.

Thrugelmir

aaj123 said:

Seeing how sceptical some of the folks here were at the time of above thread in July 2020, I can only say they learnt a lesson to be a bit more openminded about investments.

Don't confuse naivety with open-mindedness.  

masonic

You can still buy securities that give exposure to bitcoin in an ISA. For example, Ruffer investment trust hodls bitcoin.